Having homeowner's insurance is a key part of protecting your home in case of damage or in a variety of other situations. When you buy a home, your lender will require that you also get a homeowner's insurance policy. Even after you own your home outright, you will still want to have one of these policies in effect. While you may know that this type of insurance is a must, the details may be confusing at times. Here are three things to know about homeowner's insurance.
What the Policy Entails
The first thing to look into even before buying a policy from a homeowner's insurance agency is exactly what the policy entails. Each policy is different and there are different levels of coverage that you should look into. There are three main types of coverage when it comes to homeowner's insurance. The first, and typically the least expensive, is cash value coverage and it pays to replace or repair your property up to a set limit but their is a deduction for depreciation included. Replacement cost coverage is very similar to cash value coverage but there is no deduction for depreciation. The highest level of coverage is guaranteed or extended replacement cost coverage which will replace everything to as it was before a disaster.
Costs Can Vary
When looking at policies with a homeowner's insurance agency, it's important to note that the costs of a policy can vary significantly. Costs will be dependent on the type of policy you choose, the value of your home, and the amount of coverage you require. However, it's important to note that how much you pay can also be location dependent. In some areas, especially those prone to natural disaster, your policy may end up costing much more.
There are Ways to Save
If you have a little bit of sticker shock when it comes to your homeowner's insurance premiums, there are ways to save. Your homeowner's insurance agency may also other types of insurance, such as auto, and allow you to bundle and save. Making certain improvements to your home may also help you qualify for certain discounts. Shopping around and looking at multiple policies can also help you find a policy that's within your budget.
When it comes to homeowner's insurance there are a few things that you should know. First, it's important to know what a policy entails and what your level of coverage actually mean. If you find that your policy is too expensive, there are various ways in which you can save.
